Archive for Ways & Means

The Senate Ways and Means Committee held a public hearing Wednesday on a bill that would combine a public pension plan for certain law enforcement officers and firefighters with a plan for retired teachers.

The projected surplus of LEOFF 1 is about $1.2 billion, while TRS 1 is in a deficit of nearly $3 billion.

The proposed pension merger is part of the Senate Republican majority’s supplemental budget plan. Sen. John Braun, R-Centralia, told reporters in February that merging the two plans is more efficient.

“When you put them together, that reduces the net payments to reduce our pension liability and it saves money,” he said. “It saves about $2 billion over ten years in taxpayer money.”

It also allows the state to pay off the TERS 1 plan’s deficit three years early, Braun said.

Police officers and firefighters came out in strong opposition to the proposal Wednesday. They say they are being repaid for years of service by having their retirement fund raided.

“We protected your families every day. Every night, everyone of you, your wives, your husbands, your children were protected by us,”said Bradd Reynolds, a retired police officer drawing on LEOFF 1. “We’d like you to do the same for us.”

The bill also gives LEOFF 1 members a one-time payout of $5,000. Reynolds dismissed that payout.

“Offering me $5,000 to kind of sit in the corner and be quiet just let this pass – I think that’s embarrassing,” he said “I think the general taxpayers across the state would be upset if they thought that police officers and firefighters are going to get a payoff to be quiet and let a bill pass off into the night.”

Gail Hall testifying at Senate Ways and Means Committee.

Gail Hall, the spouse of a retired firefighter, said that the state is stealing from the fund. She said that teachers have a different job responsibilities, so their retirement plan should be separate.

“If anybody’s pension funding should be raided, it should be the Legislature’s pension funding because they are the ones who have got the teachers in this mess,” she said.

Joyce Williams represents people drawing paychecks from the LEOFF 1 pension fund. She said she has heard from elderly retirees calling her everyday worried that something might happen to their pension.

“These people are depending on their pension and a promise made should be a promise kept,” she said.

Matthew Jackmond was a firefighter for 32 years. He is drawing from a different LEOFF retirement plan, but he said that this is an attempt by the Legislature to “do another end-run at the eleventh hour.”

“We LEOFF members have fought long and hard to keep our pensions systems fully funded and repeal the constant attracts by the Legislature – attacks meant to fix your lack of ability to fund your projects,” Jackmond said.

No one spoke in support of the bill, but Sen. BruceDammeier, R- Puyallup, asked the committee staff what would happen to the merged pension plans if there was a financial collapse.

Staff said that retirees “do not bear the risk of loss” and the state is constitutionally obligated to make the payments. The plan’s sponsor, the state of Washington, bears the risk of loss in the investments, according to staff.

After a positive revenue forecast, Senate budget writers released a supplemental 2014 budget proposal Monday that makes about $96 million in adjustments to the 2013-15 biennium budget.

Changes include an additional $40 million for K-12 school technology, $5 million for the Real Hope Act, $5.6 million in mental health and $5 million in new prison space. It also includes $2.1 million to start a medical marijuana patient registry and issue authorization cards, according to budget documents.

Senate Ways & Means chairman Sen. Andy Hill (R-Redmond) said that while earlier in the session, some in the Senate had believed that a supplemental budget would not be necessary, the positive revenue forecast changed that point of view. He also added the budget mainly represents adjustments.

“It’s not a second bite at the apple,” Hill said.

He said adjustments were possible through a new $60 million in the revenue forecast, along with savings from having fewer people requiring long-term care or temporary financial assistance and fewer students enrolling in K-12 schools.

Sen. Jim Hargrove (D-Hoquiam) said he believed the budget preserved many of the Senate Democrats’ priorities.

“My caucus certainly agrees with K-12 as a priority, money for higher ed, but I want to make sure everyone understood we did this without cutting the social safety net,” Hargrove said.

The budget did not include teacher cost-of-living pay raises, closing certain tax loopholes and other changes that Gov. Jay Inslee had proposed earlier this year as a way to address the school spending ordered by the Washington Supreme Court as part of the McCleary lawsuit.

“The proposal acknowledges the pressing need to address our constitutional obligation to basic education. While the Senate proposal does not go far enough in that regard, it’s a start. I urge the House to make a more substantial investment in education — one that does more to provide our students with the classroom tools they need and restores cost-of-living raises for our teachers,” he said.

House budget writers are also expected to release a supplemental budget proposal this week. House Majority Leader Pat Sullivan released a statement Monday saying he looks forward to “presenting our own proposal and sitting down with the Senate to resolve our differences.”

The Senate is expected to release a supplemental budget proposal Monday afternoon, according to a press release.

A bipartisan group of senators are slated to attend the press conference. They include Senate Ways and Means Chair Sen. Andy Hill (R-Redmond) and Senators Jim Hargrove (D-Hoquiam), John Braun (R-Centralia), Kevin Ranker (D-Orcas Island), and others, according to the press release.

Since the state privatized liquor in June, overall liquor sales have jumped about 10 percent and tax revenue is coming in higher than expected. But the small, formerly state-run liquor stores are not faring as well — with some seeing a 50 percent drop in business.

The state collected $68 million in liquor revenue for the months of June, July and August. That’s about $4 million higher than expected, according to Drew Shirk of the Dept. of Revenue in an update to the House Ways and Means committee today.

Voters approved I-1183 last year, which took the state out of the liquor business and forced the Liquor Control Board to auction off about 160 state-run liquor stores. Another 160 contract liquor stores, run by private individuals, were allowed to continue to operate.

Today, 1,420 retailers hold liquor licenses — including Costco, grocery stores and liquor superstores like BevMo, which has already opened two stores in Washington and is planning more.

The increased competition has been challenging for the entrepreneurs who bought the small state stores, said Liquor Control Board deputy director Rick Garza.

“Those smaller stores, both the auction stores and contract stores, are struggling to meet the sales that we had when the state had the monopoly,” Garza told the committee. “Their sales have declined as much as 50 percent, which makes sense because you have 1,200 more retailers and competition.”

Garza said the small store owners want the Liquor Control Board to exempt them from paying the board a 17 percent retail fee — an issue he said may need to be resolved during the next Legislative session.

On Nov. 1st, the Liquor Control Board is holding an auction to get rid of its remaining inventory of 130 lots of high-end liquor, pints and minis. The board is also readying to sell its distribution center, which has been appraised at $30 million, said director Pat Kohler.

Tonight, the Senate Ways and Means committee is hearing the proposed operating budget revealed in a press conference earlier today. I’ll be live-blogging with coverage of the hearing, so keep checking back for updates!

The budget, which doesn’t make any cuts to K-12 and higher education, was generally well-received by representatives in the education communities.

Ben Rarick, of the Washington State Board of Education, said he regards this budget as an “act of political courage.” He said the choice in the budget to make education apportionment payment delays permanent is sensible.

However, Mitch Denning, a representative from the Washington Association of School Administrators, did not agree that apportionment payment delays should be permanent. He said in tough times delayed payments help, but should not be looked at as a permanent fix.

Ramona Hattendorf, with the Washington State PTA, supports the proposed budget, but asked the committee to consider their cuts to the Office of the Educational Ombudsman. She said cuts would eliminate two positions in an office of six, which could adversely affect children who need an advocate.

Representatives from state higher education expressed similar support for the proposed budget.

Margaret Shepherd from the University of Washington said this budget will allow the university to accept approximately 500 students that were turned away from the engineering department this year due to lack of space.

A representative from the Evergreen State College said after 11 years working for higher education, this is the first time she’s signed in “pro” on a budget proposal.

Members from the health care community also expressed support for the proposed budget, but many said the state needs to look for more revenue solutions in the future.

Julia Weinberg, with the Washington State Nurses Association, said the proposed budget does the right thing in regards to public health, the health safety net, and higher education. She added that new revenue sources should be identified.

A representative from the March of Dimes also supported the proposed budget, and said today the legislature “took a step to protect the most vulnerable,” by keeping programs like maternity health services and Apple Health for Kids intact.

One item of concern was cuts in funding to clubhouse programs in Washington, which serve as community resource centers for people with mental illnesses. Seth Dawson, with Compass Health, said while he understands the reasoning behind disqualifying the clubhouses from certain funding sources, he hopes the legislature will find a way to fund these programs.

Erica Horn, who works with Hero House, said clubhouses have proven to be successful support networks for those with mental illnesses. She added that clubhouses in Washington have a placement and support rate of over 95 people a month of people working “competitive jobs at competitive wages.”

The proposed budget would increase license fees for adult family homes. One representative from the Washington State Residential Care Council said this license fee increase to $370 a bed is too abrupt for adult family homes to adjust to this year.

Check out Legislative Review on TVW tomorrow at 6:30 and 11 p.m. for full coverage of the Ways and Means committee.

A bill heard by the House Ways and Means committee would qualify the product of a roll-your-own cigarette machine as a cigarette and the retailer as a manufacturer. This would add certification and taxing requirements to roll-your-own, or RYO, cigarettes and the retailers that provide these machines.

Supporters of the bill said RYO machines can be used by retailers as a way to sidestep taxes and regulations, and that retailers with these machines should be counted as a manufacturer. They say increased regulation is fair and will generate revenue for the state.

Tk Bentler, from the Washington Association of Neighborhood Stores, said this bill is needed to level the playing field for cigarette retailers.

“We have invested in our land, our brick-and-mortar stores, and we play by the rules that you guys set here in the legislature. And, we have a company that has gotten very creative and selling cigarettes at $36.50 a carton. You’ll hear testimony that this is going to cost 250 employees and 65 store outlets throughout the state — well I can assure you that we have 4,000 stores throughout the state, thousands of employees that are playing by the rules,” Bentler said.

But opponents of the bill say it could result in the closing of stores and a loss in jobs. They say it puts a higher tax burden on these cigarettes and that roll-your-own customers would likely just start rolling their own cigarettes at home, instead of purchasing traditional cigarettes in stores.

Representatives from roll-your-own distributors and stores said their industry is playing by the rules and this bill would put an unfair tax burden on these cigarettes.

“It’s been claimed in about every committee we’ve been in that we are not playing by the rules, or that we are committing tax evasion. It’s just not true — we do play by the rules — we have retail stores who pay every single tax that is applicable to our tobacco. We’re not breaking any rule, and by classifying us as manufacturers it does effectively shut down our business,” Joshua Baba, a RYO distributor, said.

The “Toxic Toys” bill, which would ban certain flame retardants from being used in children’s toys and products, would cost the state an estimated $400,000 in the next two-year budget cycle to implement. But the state isn’t considering the cost of treating more burn victims, said David Heimbach, the former director of the University of Washington Burn Center, who testified at the Senate Ways & Means committee on Thursday.

“Burns are the most expensive disease people can have,” Heimbach said. Children from lower socio-economic classes make up the majority of burn victims, he said, and they tend to be Medicaid patients who cost “money out of the state budget.”

Physician Laura Hart countered that the bill would “save significant healthcare dollars” in the long run. That’s because diseases like asthma, cancer and birth disabilities are linked to the chemicals in question, she said, and cost $1.8 billion a year to treat. The committee took no action on the bill.

“The supplemental, when you really start delving into this will be the hardest decisions you have to make,” Brown told the representatives.

If they don’t address a several hundred million dollar hole in the supplemental budget by February 4, Brown said deeper across-the-board cuts will have to be made. That would mean no longer providing hospice care, prescription, vision or dental the state’s neediest people, he said.

The bill to allow universities to raise undergraduate tuition by more than 7 percent is getting a hearing in the House Ways & Means Committee now.

The Washington Student Lobby is against it — they say students have been hit by the recession, too, and that the 14 percent increase over two years would amount to about 30 percent. The university presidents are for it — they say it could help prevent budget cuts and be less costly than an extra term.

At noon, I’ll be watching the Governor’s inaugural address to the House and Senate. Join me — and feel free to e-mail in any questions you have about what she’s saying: nikis@tvw.org.

At 7 p.m., you should plan on watching The Impact. This week’s show will feature an interview with Gov. Chris Gregoire, a profile on the big issues lawmakers plan to tackle this session, and a segment with top legislators in the House and Senate answering your questions on the budget.

And when you’re done at the Inaugural Ball, come back home and tune into the 11 p.m. Legislative Review show. Today, I’ll recap the Governor’s address, cover her economic development proposals and drop in on the House Ways & Means committee’s continued public hearings on the proposed budget. I also have my eye on the 1:30 p.m.Higher Education Committee, where they will discuss federal and state actions in higher eduction.

About Capitol Record

The Capitol Record is TVW's blog about state government. TVW is a non-profit network modeled after C-SPAN, airing gavel-to-gavel coverage of the state Legislature as well as independently produced shows. For comments or questions, e-mail Christina Salerno.